In a surprising development, as part of the reaction to the proposed merger of the U.S. Professional Golfers' Association and LIV Golf professional golf tours, Senator Ron Wyden, the Chairman of the Senate Finance Committee, has introduced two bills, the latter of which would repeal U.S. Code Section 892 for certain sovereign wealth funds.
What you need to know
- As currently drafted, the Section 892 bill would apply only to
sovereign wealth funds that have over US$100 billion of assets and
are organized in countries that either:
- have neither a free trade agreement nor a tax treaty with the U.S., or
- are designated by the Department of State as a "foreign country of concern".
- Government-owned investment plans organized in Canada would not be impacted by the current version of the bill due to the free trade agreement between Canada and the U.S. and the U.S.-Canada Tax Treaty. Further, Canada is not currently designated as a "foreign country of concern".
- The bill would also not apply to investments made before its effective date.
At the moment, we do not view passage of the bill as likely but it is something to monitor as it develops.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
